Retiring is a goal many individuals are aspiring to achieve. However, it can be difficult to transition to living off of your savings instead of earning a paycheck. It’s possible to create income streams to fund your retirement. Here are some ideas for retirement income streams to ease your transition.
A very common investment product for those looking for a guaranteed income during retirement. Investing in fixed deferred annuities is a great way to mimic a steady paycheck and supplement your social security income. Prior to retirement, you pay a premium into the annuity and earn a fixed amount of interest on the account. Once the account is funded and you are ready to retire, the annuity will pay out monthly, either for a set number of months or for the lifetime of the retiree, depending on the product.
Investing in individual stocks, exchange-traded funds, and mutual funds all have the opportunity of earning you a dividend payout. Usually paid out quarterly, these dividends distribute the profits of the company to the shareholders. With a little advanced planning, including many dividend-paying investments can provide significant income in retirement. An added bonus is that many companies increase their dividend over time, allowing your retirement income to increase and keep up with inflation.
Real estate investing is often touted as one of the best ways to build long-term wealth. As part of a retirement investment strategy, real estate is a great way to create recurring monthly income through rental properties. As long as the property is paid in full by the time you retire, the rental income can be used as an additional income stream. Keep in mind that rental income isn’t always guaranteed. Occasionally tenants leave and a property remains vacant. Properties also need repairs and occasional upgrades. Include these expenses in your budget.
Retirement doesn’t mean living only off your savings accounts. It is possible to have multiple passive income streams to fund your retirement lifestyle.